| The purchase tax of rubber had been reduced to 4 per cent from the earlier 12.65 per cent from April 1 and this will help the tyre industry to save Rs 180 crore per annum according to some estimates. Of the total production of seven lakh tonne of natural rubber, the tyre industry alone consumes around 60 per cent. |
| The reduction in tax means Rs 45,000 can be saved for every nine-tonne truck load of rubber. |
| But the growers are in dilemma due to the fluctuation in prices and higher imports. |
| A local grower said the market is today is quite similar to 1995-96 when prices flew "" the average price for the year was Rs 52 per kg. This happened due to low stocks "" which stood at just 68,000 tonne on March 31, 1995. |
| But due to increased import in the subsequent years, there was a glut and prices dropped to an average of Rs 30. |
| Between 1996 and 2001, a total of 1,84,000 tonne of rubber was imported. Today, the price is in tune with the global prices after almost 10 years. |
| As on March 31, 2005, the total stock was 77,000 tonne, which is one of the major reasons for the recent increase in prices. |
| The increased inflow of imported rubber is giving local growers a headache. |
| According to Rubber Board sources, total import in 2004-05 was 66,198 tonne, but the shortfall in supply with regard to demand is to the rune of 5,000 tonne only. |
| As the export is very low-key, the import may cause an increase in stock and the market may face a similar situation as that of 1995-96. Some growers go to the extent of alleging that this could very well be a planned move to bring down the prices in the local market. |
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